tv Bloomberg Markets Bloomberg March 10, 2016 3:00pm-4:01pm EST
and 3:00 a.m. in hong kong. welcome to bloomberg markets. from bloomberg world headquarters in new york, good afternoon. i'm vonnie quinn in for betty liu. .ere is what we are watching a fresh round of stimulus may not be enough. outside, i would say the majority in favor has been overwhelming. china, thenwhile in south is lumping for a second .traight session we will speak with kevin rudd, former us trillion prime minister, about china's options. and apple getting ready for its latest product event. so, are small screen phones suddenly a hot product again?
we are one hour from the close of trading. let's go to the markets desk where julie been watching this all unfold. julie: what a wacky day. .'m looking at commentary there's saying that the measures by the ecb will not be enough to help the eurozone. you look at stocks. in terms of the push and pull of the session, we have a potential deal helping lead the s&p 500. food sales rising for that gaining on expedia
the piper jaffray outlook. if you look of the bloomberg and the imap and the sectors on the move, you have energy and tech as the two worst performing groups. telecom, materials, and health care faring better on a relative basis. and energy -- attempting to acquire williams -- a lot of questions about getting that done. they are raising cash to pay down debt once the deal gets done, but relations between the two companies are frosty in that deal is underscoring that and we see declines and other materials-related shares. related to the ecb, we have been watching the euro today, which of course fell right after the announcement of the stimulus , as mariod recovered draghi said. this is likely to be the last interest rate increase.
and interest-rate action. we see the dollar fall against the euro. people are looking for safety here. it is more of a risk off environment as the day has progressed. backe seeing a bounce there and some of the mining stocks as well. let's get a check of the headlines on the bloomberg first word news with mark crumpton. mark: president obama's as there is little distinction between donald trump and the other republican presidential candidate. mr. obama was asked about the 2016 presidential race during a news conference with visiting canadian prime minister justin trudeau. president obama: it's not as though there is a massive difference between mr. trump's position on immigration and mr. position on immigration.
mr. trump may be more provocative. for that matter they are not rubio'sferent from mr. position. despite the fact that mr. cruz and mr. rubio, their own families are the products of immigration and the openness of our society. mark: president obama called the gop presidential primary a circus and a republican crackup. the president says he takes responsibility for failing to bridge political divides, but says he has not contributed to the worsening tone of political rhetoric. ohio governor john kasich has picked up an important endorsement. cleveland.com which includes the iseveland plain dealer" backing john kasich for "the good of the country." he has also won the endorsement of the ohio state football coach urban meyer. he has promised to drop out of the race if he does not win his home state.
california has voted to raise to purchase tobacco from 18 to 21. governor jerry brown still has to sign the measure. the measures would also restrict electronic cigarettes, not regulated by the federal government. officials are trying to figure out how to apply $30 million from the state in michigan. residents drank from contaminated water for nearly to death years. global news 24 hours a day, our 2400 journalists in more than 150 news bureaus around the world. thanks. the government is targeting gdp 7% this year. to --ning us, our correspondent
kevin rudd, the former australian prime minister two times over. really 26 to and the 28th as well? he was also the president of the asia policy institute and all caps of other places. welcome and thank you for joining us. i know you are a china expert. guest: systems of the world are being judged as not capable of delivering what the vast middle class want of their governments.
when you have a vast group of the middle of the political system no longer satisfied by mainstream political parties, you will see splintering occur? -- splintering occur. oxicr that the t anti-immigrant, insight asylum -- anti-asylum seeker sentiment around the world, that adds to the rhetoric. those who come from a centrist political tradition -- i am from the centerleft and those from the center-right -- is to thing that ourhe constituencies are seeking -- reasonable levels of economic growth, reasonable levels of opportunity. if that is not being a livered in this time of slowing global growth, i fear history teaches us we will see more.
government do we get to work again? had we get the establishment to work again? it is partly to supply stability to the monetary system. the core role of governments is to do two things. one, to ensure that there is a fiscal discipline which fits the is the cycle that expands when the business cycle is contracting and it contracts when the business is booming. to do that effectively, governments have had to try to get their balance sheets back into repair after the financial crisis. what i fear is when governments governments you see contracting, we may be compounding the problem of slowing government growth. the second element is frankly to deliver the platforms of future growth, and that's not just
through education, skills, and trading, it through opening the doors to global trade opportunities, as opposed to what i see as new protectionism across the world today. vonnie: have you see the nomination process playing out in the united states? -- how do you see the nomination process playing out in the united states? inst: i have just been russia and china. it has got behold world scratching their head. you see a microcosm of what we were discussing before. the middle class less well off than it was, a shrinking middle class by income standards, and it is polarizing to the left and right. from a foreign policy point of view, i think the world is quite concerned about some of the candidates on offer. i do not wish to get into names. is the the united states number one military power in the world, number one economy in the
world, what the united states does through its electoral process -- sure, you get to decide here in the u.s., at the implications for all of us are huge. what the world will be looking for is a strong, stable america in the world providing good economic and geopolitical leadership. a currency that is weakening by the day, although we did see a little strength today -- we are talking about a 1.34, this trillion dollar. talk to people about why they want their currencies to be weaker and why it may not be a good thing always. uset: the whole idea was to the exchange rate as an automatic stabilizer in the economy. so, when you have those economic , themstances arise
currency would adjust accordingly, and we have been through this cycle many times before. this trillion dollar has seen much lower rates than this. -- the australian dollar has seen much lower rates than this. it is easy for the international community to over exaggerate the inent to which the collapse commodities prices fundamentally got's the australian economy is a broad-based economy. we have had decline in commodity prices for three years, but we just entered our 24th year of consecutive economic growth. the only major economy not to go into recession. we've got to do more, but let's assume a weakening china spells economic disaster for the broad-based economy -- it is a fascinating example. other economies are in recession. i want to show some charts. china's imports down.
we also have examples of the broad-based basket of goods and services down as well. thischina came out with new five-your plan -- is it attainable? guest: i think in a broad sense, yes. it's not a wildly idealistic document. the predicted growth rate for the next five years is -- i think the current growth rate is somewhere between 6% and 7%. but this all occurs in the context of china going through a deliberately engineered economic transformation from an old their model, which serve economy well for 30 years, based on labor-intensive manufacturing with high levels of state investment in infrastructure, to a new growth model, which is based instead on, number one, ensuring you have a much more for personal and
private consumption. secondly, a bigger role for private firms, and the data s that private firms are increasing their contribution to growth. consumption -- the services gdp,r is more than 34% of headed the right direction and consumption notching up, not as rapidly as we like. they're in the midst of the biggest economic transformation in the world for decades and decades. what will be the exchange rate for them to achieve growth? guest: there is not a direct correlation. what i would like to say generally about the exchange rate is this. easingr the quantitative -- the euro, the center dot three.
ecb.employed by the the exchange rate has come down 4.6%. i think what you're likely to see in the year ahead, if i was --ing a bold production prediction is in the next 12 months we will see the depreciation in a comparable amount -- that is in small bits and pieces. i think chinese authorities have decided against a one fell swoop valuation in order to restore its competitiveness. kevin rudd, thank you for joining us. i wish we had more time. time former prime minister' oppeared coming up -- ray dali o makes a big move at bridgewater associates. the tension inside the firm speaking ofove? apple, their latest event will
on: do i disagree with him some things, yes? we have a process for working through that. gives? so, what are we making too much of this infighting at bridgewater? talking about how he isped to invent the ipod this purely a good move technology wise? dalio has been quick to say media reports have been sensationalized and so on, and it is true. bridgewater has this culture of fighting it out internally. it was tucked away in westport and we are not supposed to see a
lot of that. but we know that bridgewater has a huge emphasis on technology. they use quant models and algorithms to do investing and they are making more of a push in this direction. so, it is clear they need somebody there overseeing the technological aspect. if you pull it up on linkedin, there's a time of engineers, and some would say that bridgewater is more of a technology company that an investment firm in that way. sense. make a lot of they really want them to focus if they are -- or becoming a technology firm, is it more important to be ceo? vonnie: just give us a little bit more about the infighting. reporter: the wall street journal reported they had ray a to employees to
vote on their behavior. if you talk to folks who work at bridgewater or other stories, there has been a culture of let's have everybody vote and produce of eight and decision-making, and you are sick -- participate in decision-making and you're supposed to participate. everybody carrying around an ipad. you are required to give a certain amount of feedback a day . in this context, it's not so strange that there would be this kind of debate internally. i think it's just when you are outsider'sit from an perspective. much,: thank you so reporting for us from bluebird news. check out her stories. still ahead on "bloomberg markets," we check in on the options market and here are some stocks at their 52-week highs. dollar general and coca-cola.
julie: this is "bloomberg markets." i'm julie hyman. joining me, the managing director from chicago. what a day for volatility, which i know you look at. we have this wild day in the wake of the ecb. and then we have them coming -- what have you seen in the options market that stands out to you about this day? >> right, we saw volatility really getting crushed. even though it was at that key level. we saw that big reversal.
we're seeing volatility hang in there. much like earlier in the day. i think there are concerns. even though the market has been able to get back to even, that volatility expectation has been elevated. not the wild of them , but theates commentary coming out of that meeting -- where you guys talking about? to go have one down into basically with the doj monday leading into the wednesday decision with the fed. i think said,eme -- like you moving forward the guidance will be significant. the theme is what took place
today. you see this currency war continuing to evolve. that is part of the theme. we get in the mindset of traders . we have to glean information moving forward. i think there is still volatility next week. we are -- julie: we are in between catalysts when it comes to ford. we got their monthly sales for february. what sort of triggers your interest? >> a couple things from a valuation standpoint. we are seeing a nice automating pattern in ford. the thing about this trade basically, i am looking at selling a put spread in june. something to collect in june. to june, isng out
there a reason you decided to wait for that time rising? >> yeah, there is. there is good liquidity and those june options. you sell that spread for $.50, you collect that. do not mind collecting 3.5% waiting to be put in the stock. thank you for talking to us. in chicagocboe talking options on this wild today in the wake of the ecb. we'll be right back with more "bloomberg markets." stay with us. ♪
hey how's it going, hotcakes? hotcakes. this place has hotcakes. so why aren't they selling like hotcakes? with comcast business internet and wifi pro, they could be. just add a customized message to your wifi pro splash page and you'll reach your customers where their eyes are already - on their devices. order up. it's more than just wifi, it can help grow your business. you don't see that every day. introducing wifi pro, wifi that helps grow your business. comcast business. built for business. ♪ live from headquarters, let's start with a check of the headlines. >> we have mark crumpton.
>> campaigning in florida, hillary clinton said, it does not matter which republican candidate she faces, if she wins the party nomination. when asked which of the leading hopefuls she would like to take on, she said, it is not for me to decide, but given what they have said, i will take any one of them. she was in the state ahead of next week's primary. president obama welcomed the canadian prime minister to the white house today, the two leaders looking to join forces to combat climate change. the u.s. and canada released a joint statement, committed to it emissionucing methane by 2025. as part of that effort, the yuan is beginning regulatory efforts to limit emissions at existing infrastructures for the first time. the senate judiciary committee
is not budging on the decision to block the supreme court nomination by president obama this year. >> we did not play games, we did not hide the ball, we made it clear to the public, exactly what we were going to do and why we are going to do it. >> the chairman says that the democrats are criticizing the strategy to score political points and that efforts to change his mind will not work. democrats blame the republicans for deciding not to hold hearings or tivo. the louisiana national guard is assisting local authorities in the northern part of the state with high water rescues. the region has been inundated with heavy rain. more than 360 people have been evacuated since yesterday. ♪ day,obal news, 24 hours a powered by 115 news bureaus around the world. innie: the market will close
a few minutes. abigail has the latest. abigail: it has been a day of wild volatility. it is trading down more than 1% this afternoon. now nearly flat, this is in the wake of the address of policy moves earlier. the chief economic advisor of -- spoke at an event here at the nasdaq and the saying that the intention of the move was to send currency lower and stock higher, but that time would tell if the strategy would be effective. in the meantime, it looks like we will have continued volatility. volatility for the nasdaq, shares are plunging after a note saying that the economic profitability is given by -- well -- is driven by acquisition.
this is a pretty bold policy, they have a near-term target of $40. the reason that it appears to be models fortreet has them to go up by 80% in 2016. that would be $4.86, so pretty decent growth. bonnie: absolutely. i saw a tweet saying that this is the most work they have done that. is doingexpedia nicely. they have upgraded the stock. mike olson thinks that the acquisition could drive them upside this year. he has a news -- new price target and expedia could climb back to its current record high. bonnie: thank you. judy -- julie hyman has breaking news. julie: this is a developing story that we talked about
earlier, after it was reported that trans canada was considering an acquisition of columbia pipeline group. now it is reported that talks of a possible transition are -- transaction are at a standstill. this is from people who are familiar with the matter. transcanada will be in talks with this deal, that was confirming a story, so it looks like this is not happening as of yet. i want to check on the stocks. come be a pipeline, we can see taking a sharp -- leg lower. we have an increase of 6%. it has taken a leg lower after the story came out. this is after transcanada and the u.s. shares are doing the opposite, this is a little bit higher, although they are still down by nearly 3%. has justhe s&p 500 turned positive. we will see. hard to keep track. we are watching this very closely.
and apple, they have been bouncing around. they were lower moments ago after the company announced the latest product even. this is going to be a smaller screen device. encryption ongoing situation put a damper on apple? we have more. we will talk about the encryption, but first the idea that we are going to have a new smaller screen iphone again, this is not new, but will it capture the imagination after the bigger screens? guest: i do not think so. it is necessary, apple has a problem that they have a sense, or a pressure, to get bigger because of samsung. almostve actually gone too big and people were complaining that they wanted a thin phone, like the iphone
five. so this is apple trying to essentially fill in that whole -- hole in the product line. this is not innovation. it is just changing form factors , no material changes from what we can see, possibly slightly faster, but this is about filling a hole in the product line. bonnie: so is apple getting a little less strict? guest: steve jobs would not be very happy with any of this. the problem with the new apple is, not only are there more leaks, but it is obvious what they are going to do next. and since september, this has been changes in the product line where they are filling in holes in adding different sizes and shapes and colors. not so much innovating. i think that there are two dimensions that jobs would be disappointed on. upgraded in
september, so this will be such a good product that people go to it? guest: i don't think it will make a difference in that regard. they are targeting people who have held back and continue to own an iphone five. and want something to upgrade to. maybe they did not go to the six because they thought it was too big. it is incremental for the business, part of the reason why the stock is weak. it is not seen as a big change. and there is a sense that the smartphone market is maturing, so this is changing nothing. bonnie: what about the future of the stock? they are coming out with new products, trying new things, maybe it is not doing enough of them? done: no, i think it has all it can do any marketplace that is past the point where they have geometric growth. they have really energized the company. and so now, it is forced to do incremental things, they cannot
change the game. i am negative with the company stock until you see something where it is entering the market place where you have dramatic growth and size. maybe that is cars, we thought maybe for a while, television. there is truly nothing they can do with smartphones that will turn it into a growth market like it was years ago. bonnie: is the encryption case completely different or separate from the stocks? guest: i think it is largely separate, i do not think it will change in terms of financials of the country and the likelihood of people buying or not buying, for the most part people are not paying attention as buyers on the anchorage inside good but it is in overhang -- inside. but it is an overhang. it looks like this is heading to the supreme court. -- it is nots
doing much today p what kind of response with the fbi come back with? argued that this is a terrible case for them to choose, because we have an example that combines three areas of badness. this is related to terrorism, and for actual owners of the iphone isce the accessed, and apple says they can do it. but these pieces together and this is a very difficult case for the company. security is important and the computer industry and fun industry is doing their best to make these devices more secure, but this was a bad case to choose. will it be the big anticipated event that apple events usually are, but -- or do you think that maybe people are becoming jaded?
guest: this feels like people are going to the motions. it looks like there will be changes in the ipad and ios, plus a smaller or identical device in the line of the iphone 6, but we have lost the plot with innovation. bonnie: thank you so much. thank you for joining us from san diego. apple, once again, of about $.14. ahead, we look at the impact of the ecb sections on currency. here is the euro versus the dollar. the dollar was strengthening. suddenly, there was a reversal. ♪
bonnie: this is "bloomberg markets". a quick check on the markets. we will look at the major averages. the industrial average, down to less than 10%. we've the s&p 500 down more than a 10th of a percent. and the nasdaq down as well. it has been a volatile day. and a look at sector leaders and laggards of material and telecom leading the way -- laggards. material and telecom leading the way. it is time for the business flash. creditor to now a the u.s. for the first time on record. data published shows that the stock of new us -- of u.s. assets are everything from corporate acquisitions -- exceeded assets hold by americans in canada for the first time since 1990.
and in talks with jpmorgan and goldman sachs to sell the last batches of about $1.1 trillion worth of instruments, that is according to people with knowledge of the matter. name swapssingle since last year. the u.s. banks have already purchased some of the instruments. and a first for police cars, doors that can protect against bullets. ford will be offering the doors on police cars and suvs. they will be the first in the u.s. to be the highest standard for body armor. it will be the equivalent of a bullet-proof vest. shot from aullets high-powered rifle is what it will protect against. and that is the business flash. its musclesed today, they went for more, lowering rates and making it
easing program larger. the currency staged a major rally after these words -- >> from today's perspective and taking into account the support of our measures to grow from inflation, we do not anticipate that it will be necessary to reduce rates further. is joe joining us weisenthal. i know that you were watching this like me and are stunned. it looks like mario draghi has regained his magical powers, but then suddenly we are back to this. joe: when the policy measures came out, it looked like he had thrown everything add it, they did not just cut deposit rates, they announced that they would be buying high corporate credit,
they are doing direct measures to help the banks specifically, that is important because there has been weakness in the baking sector -- inking sector. but then things reversed, the euro had a massive rebound and it goes to show that the power of signaling, how important that is versus traditional measures. julie: it was written in bloomberg view, that the euro has now strengthened. says theyrio draghi will be targeting the euro, he says he is there to cure the economy. joe: i agree and furthermore, i think that he was say that any judging of a policy measure based on one day is silly. i think anybody that is looking at today and the bazooka backfired or why did he say that, the measure is will it
stimulate lending, will icad the pipes clean, and will inflation accelerates in the eurozone? right now, it is going in the wrong direction, but based on that, they know that this is working. getting the economy going, not one day's move will effective. bonnie: it is a glass half full approach, that maybe the eurozone area could be getting stronger eventually, not immediately. but eventually. and they are covering the short term. joe: there is a lot to be said for the measures today, specifically targeting high corporate credit, specifically targeting banks, that should be powerful stuff. it may not show up right away and people may be nervous about one days worth of language, but i think it will be sometime and people might realize that there is a powerful tool available, it
♪ bonnie: this is "bloomberg markets", breaking news, so we will go to julie. julie: the u.s. has responded to apple's motion to vacate the order to unlock the apple iphone. bernardinoto a san -- belonged to a san bernardino terrorist. they are extending the order. the court has the power to order apple to help unlock the iphone.
these are headlines so far. it looks like it has delayed a step in the back-and-forth between apple and the u.s. government over this issue of what apple says is privacy and with the u.s. government says insecurity. -- is security. and we got news from apple today on the product side, march 21 is the next time we will learn about the newest in the apple products line. bonnie: a lot to happen in this case, in response to the initial court order from february 16, where prosecutors won the case requiring apple to help the fbi. and of course, we had the technology community chiming in. we want to go to the san francisco bureau, talk to an expert on all things encryption. corey, the fbi's response, does it have anything substantial? corey: the government is arguing
in their response to apple, in a that theated inquiry, government is arguing this is limited. they say that apple has enormous resources, the federal government saying that they will take just a couple of employees -- six of their 100,000 employees for as little as two weeks, then going on to say that this is a limited order, applying to this just one phone, this is not a master key they say or backdoor. rather than a backdoor, they say that this is just for the one phone and apple needs to do it and they are making a strong argument that this case is limited in scope and well within apple's means to achieve this court order. bonnie: that is basically what we heard the fbi director say, so does apple have any, anything
new to counter this with? next: apple has until tuesday to respond, but i think that they have clearly indicated that this is not a one-time thing. they say that the request was exactly the same thing and if they change their operation for this, they will have to change their operation on many courses. they say that this is a master key. so it is clearly -- what the government is doing, they are saying that this is about this case, this phone, nothing more. what we have heard from experts who have looked at this, they think that this case is very specific, selected by the government and fbi and justice department, to prove an example that the threat of terrorism raises the stakes and maybe raises public sentiment. and that the stakes could be higher in this case and that this is the best case to make that apple should open the phone.
where a case about something else, maybe it would not rise to this level. who knows whatever other court case could raise this, a drug dealer xfone could raise this, as well. -- drug dealer xfone could raise this as well. bonnie: we have a story on the bloomberg today talking about one particular louisiana mom, her murder, and it could have been solved if they had gotten access to a phone, but apple refused. then they started refusing a bunch of cases. corey: and the fbi is arguing that -- apple, they want to alarm the court about privacy, it evoke a larger -- and it would evoke larger debates. they say that this is a day version. -- divergent. apple needs this case to be about more than one phone. bonnie: both sides are using colorful language, so how will
apple start the next phase of this? corey: hopefully with a lot of colorful language. look, it is an interesting story and it has ramifications beyond this case, whatever the fbi's argument is, this will set a president -- president. and the white house was ready with the response. nobody is pushing this down to a lower court level. they recognize the implications for these businesses, and for this case and maybe for society, more broadly. and i think that apple point out that it raises these issues about how much information is too much information to give to the government. just because this could help a criminal investigation, does the government have a right to demand this information? amazon,we also saw facebook, microsoft, all in support of apple not allowing the government overreach. thank you. corey: i will keep looking
through this and bring you more. bonnie: they could. cory johnson in san francisco and we thank him. that is "bloomberg markets" -- i just want to check apples stock. it is down about 1/10 of a percent. major averages are all down, but not too much. the s&p 500 is down. and we are looking at the dollar index is down 1% now. a volatile day for the dollar. you have been watching "bloomberg markets". stay tuned for "what'd you miss?" ♪
♪ stocks closing lower today. joe: the question is, "what'd you miss?". scarlet: the ecb takes a step in this demo is program and european brooks best banks move. joe: and we look ahead to the fed decision in the u.s. next week, what is the tipping point for another rate hike -- rate hike? scarlet: in volatility in the region is evening. ♪ scarlet: we begin with our market minute, the late recovery shaved some of the losses off equity indexes, but could not get stocks out of the red. mario draghi unveiling the bigger than expected stimulus package, but then he backtracked. joe: it has been a remarkable morning, they unveiled the measures and we saw the euro